What To Expect During A Commercial Lease Process?

So you’re ready to open your business. You’re ready to grow your business, and you found the perfect location to lease office space, lease a restaurant, lease warehouse, lease a school and you’re ready to talk terms. And we do several dozen commercial leases a year.

Ranging from you know, a thousand square feet for an office to a building of 70,000 – 80,000 square feet for an educational institution or multiple uses. And we like to get involved at the term sheet stage. Typically clients who are looking for space have a real estate broker who have showed them a variety of different spaces which may suit their needs .

And the landlord will draft or the tenant’s broker will draft the term sheet and the term sheet will set forth basic things like location of the property, what rent is going to be paid, the length of the term of the lease. Is it two years. Is it five years? Is it 10 years? Are there renewal options? What is the landlord permitting the tenant to do in that particular space? Will the space be delivered raw? Will it be delivered finished or something in between? Will the landlord be putting in money to build out the space? Will the landlord be giving the tenant allowance to build out the space?

We like to get involved with a term sheet stage, because we typically work with our clients on an ongoing basis. We know their needs, we know their likes and dislikes and we could work alongside of their real estate broker to really put together the best term sheet to advance to the landlord or to enhance and increase the opportunity to secure the space they are looking for.

So you found the space, you’ve negotiated a term sheet along with the our assistance and along with the assistance of a real estate broker and we’re now ready to go to a lease stage. 99 times out of a hundred it’s the landlord’s counsel or if it’s a sublet, it’s the sub landlord’s counsel who’s going to be drafting up a lease or a sublease.

And the lease can range anywhere from 20 pages to a 100 pages depending on its complexity. And as tenants council we’ll get a draft of the lease and we start to look through it for a variety of different things. Both, some of which we discussed at the term sheet stage, making sure that all the business terms that have been agreed upon are properly reflected into the lease.

But then also everything else that goes into a lease and there’s typically a lot of things that go into drafting a lease and a lot of things that as a tenant you should be concerned about and want your real estate lawyers to be walking you through.